Correlation Between Invesco Gold and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Invesco Gold and Sterling Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Invesco Gold and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Gold Special and Sterling Capital Short, you can compare the effects of market volatilities on Invesco Gold and Sterling Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Invesco Gold with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Gold and Sterling Capital.
Diversification Opportunities for Invesco Gold and Sterling Capital
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Invesco and Sterling is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Gold Special and Sterling Capital Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Short and Invesco Gold is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Invesco Gold Special are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Short has no effect on the direction of Invesco Gold i.e., Invesco Gold and Sterling Capital go up and down completely randomly.
Pair Corralation between Invesco Gold and Sterling Capital
Assuming the 90 days horizon Invesco Gold Special is expected to generate 17.96 times more return on investment than Sterling Capital. However, Invesco Gold is 17.96 times more volatile than Sterling Capital Short. It trades about 0.08 of its potential returns per unit of risk. Sterling Capital Short is currently generating about 0.04 per unit of risk. If you would invest 2,623 in Invesco Gold Special on September 4, 2024 and sell it today you would earn a total of 203.00 from holding Invesco Gold Special or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Gold Special vs. Sterling Capital Short
Performance |
| Timeline |
| Invesco Gold Special |
| Sterling Capital Short |
Invesco Gold and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Gold and Sterling Capital
The main advantage of trading using opposite Invesco Gold and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Gold position performs unexpectedly, Sterling Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Invesco Gold vs. Massmutual Select Diversified | Invesco Gold vs. Ep Emerging Markets | Invesco Gold vs. Fundvantage Trust | Invesco Gold vs. Legg Mason Partners |
| Sterling Capital vs. Vy Goldman Sachs | Sterling Capital vs. Gamco Global Gold | Sterling Capital vs. Invesco Gold Special | Sterling Capital vs. Global Gold Fund |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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